Weniger v. Union Center Plaza Associates

• Decision Date: 16 December 1974
• Docket Number: No. 71 Civ. 4283 (JMC).,71 Civ. 4283 (JMC).
• Citation: 387 F. Supp. 849
• Parties: Sidney N. WENIGER and General Resources Associates Incorporated, Plaintiffs, v. UNION CENTER PLAZA ASSOCIATES et al., Defendants.
• Court: U.S. District Court — Southern District of New York

387 F. Supp. 849

Sidney N. WENIGER and General Resources Associates Incorporated, Plaintiffs, v. UNION CENTER PLAZA ASSOCIATES et al., Defendants.

No. 71 Civ. 4283 (JMC).

United States District Court, S. D. New York.

December 16, 1974.

COPYRIGHT MATERIAL OMITTED

Sage, Gray, Todd & Sims, New York City (William J. Allingham and Robert W. Brundige, Jr., New York City, of counsel), for plaintiffs.

Demov, Morris, Levin & Shein, New York City (Irving Bizar and Barbara P. Sugarman-Abrams, New York City, of counsel), for defendants.

OPINION

CANNELLA, District Judge:

Plaintiff commenced this action to recover $249,200 in brokerage commissions in the Supreme Court of the State of New York, New York County, in July of 1971. On October 1, 1971, the action was removed to this court by the defendants on grounds of diversity of citizenship. The trial of this cause was had before the Court, sitting without a jury, on April 8, 9 and 10, 1974. At the close of the trial each of the parties moved for judgment. For the reasons indicated below, plaintiff's motions are granted and defendants' motions are denied.

THE FACTS

Plaintiff Sidney N. Weniger (a citizen of New York) is, and was at all times here relevant, a real estate broker duly licensed by the State of New York.¹ Defendants Sheldon E. Bernstein and Melvin H. Cohn are, and have been at all times here relevant, general partners of the defendant Union Center Plaza Associates, a partnership through which they dealt in the transaction at issue. (None of the defendants is a citizen of or an enterprise having its principal place of business in New York.)

The evidence adduced at trial took one of three forms: (1) the testimony of two witnesses (Plaintiff Weniger and Defendant Cohn); (2) stipulations of the parties; and (3) documentary proof. In this regard, the Court notes at the outset of its discussion that it finds the testimony of Messrs. Weniger and Cohn to be inherently incredible. The Court, having had the opportunity to observe these individuals on the witness stand, is of the view that their respective interests in the outcome of this litigation caused them, to a somewhat substantial degree, to color their testimony. However, the factual questions presented are not, for that reason, difficult to determine. The contemporaneous documentary entries of the parties clearly indicate their intent and their understanding of the relationship between them at a time prior to the instant dispute. A fair reading of the documents, and the law as relevant to them, leads to but one conclusion, namely, that the plaintiff must prevail.

In August 1967, defendants requested that Weniger obtain on their behalf a commitment for a permanent first mortgage loan for the construction of office buildings on certain premises in the District of Columbia known as Union Center Plaza. In connection with such request, a brokerage agreement was entered into between Weniger and defendants. This agreement is composed of two letter-agreements, one dated August 23, 1967 and the other dated August 25, 1967 (hereinafter the "brokerage agreement") (Exhibits 3 and 4). Pursuant to this agreement, defendants agreed to pay Weniger, upon their acceptance of a mortgage loan commitment procured by him, a brokerage commission of 1½% of the amount of such commitment. The agreement provided that Weniger's services were to be deemed fully performed and his commission was to be fully earned when the permanent first mortgage loan commitment procured by him was received and accepted by the defendants. The agreement also specified a schedule for the payment of Weniger's commission. Under this schedule, one-half of the earned commission was to be paid "on signing of commitment" and the other half was to be paid in equal installments "out of first four construction draws, or at final closing, if fewer than four draws take place." The agreement further stated that Weniger was the "sole broker" in the subject transaction, notwithstanding the fact that the defendants acknowledged that he was acting in cooperation with certain other co-brokers pursuant to a separate agreement between Weniger and these individuals. In this regard, it is to be noted that the agreement expressly provided that the fees recoverable thereunder would be paid directly to Weniger.

In addition to the terms indicated above, the August 1967 agreement further provided for the delivery of a $10,000 good faith deposit to Weniger. The agreement stated:

This deposit shall be returned upon execution of a loan or commitment, or upon the denial of the application for such loan or commitment, or at the expiration of 45 business days from date hereof in the event no commitment has been offered on the proposed terms.

(Exhibit 4). As to this provision, the defendants have contended that the time periods specified therein constituted a durational limitation of the brokerage agreement, reading it to mean that the agreement would expire upon the happening of any of the events specified or, at the latest, forty-five business days from August 25, 1967. The Court does not adopt this construction, but rather views this paragraph as bearing only upon the time during which plaintiff might retain the good faith deposit. Equally without probative value is the event of Weniger's return of the $10,000 check, as it adds nothing to the agreement nor does it evidence any intent on his part to terminate the August contract. The Court finds that the August 1967 brokerage agreement was of an unspecified, open-ended duration, hence, performable within a "reasonable" time.

In addition to the provisions concerning Weniger's employment, the brokerage agreement also specified various terms and conditions upon which plaintiff would present defendants' request for a permanent first mortgage commitment to the New York State Teachers Retirement Board. In essence, the agreement provided that plaintiff would seek for defendants a permanent first mortgage loan commitment in the amount of $18,000,000 with interest at 7% per annum, for a term of twenty years, and with debt service of 8.49% constant. The agreement did not, however, either in words or substance, limit Weniger's right to obtain on defendants' behalf or their right to accept, a commitment with terms at variance from those specified in the contract.

On July 31, 1968, after a myriad of intermediate negotiations, and the issuance of informal letters of commitment by the lenders (the specifics of which are not here relevant), a formal commitment for a permanent first mortgage loan was issued to the defendants jointly by the New York State Teachers Retirement Board and the New York City Employees Retirement System. This commitment, which was accepted by Union Center Plaza Associates (per Mr. Cohn) on August 28, 1968, and thereafter amended on September 3, 1968, provided, inter alia, that a permanent first mortgage loan in the amount of $17,280,000 would be issued to the defendant Union Center Plaza Associates jointly by the lenders with interest and like provisions which were at variance with those initially sought by the defendants (and specified in the August brokerage agreement) (interest at 7¼% and debt service constant of 8.75% (city) or 8.55% (state) and with a term of 24 years, 5 months (city) or 20 years (state)) and, in addition, the loan was made subject to "approved leasing" of Union Center Plaza. It is not disputed herein that this commitment was procured through the efforts of Weniger (and his co-brokers). Nor is it the subject of dispute that the joint commitment was never exercised or drawn upon by defendants and that it was ultimately cancelled, unused, by the lenders.

From the facts found by the Court at this juncture, the two principal questions raised herein become apparent. The first is whether the August 1967 brokerage agreement continued in full force and effect between the parties up to and including the point in time at which Weniger procured the formal loan commitment on behalf of the defendants. For the reasons indicated in the next succeeding paragraphs, the Court concludes that such agreement was neither abrogated nor terminated by the parties and that it was extant at such time as the formal loan commitment was issued to and accepted by the defendants. The second question presented, whether the commitment of $17,280,000 which was procured by Weniger and accepted by the defendants constituted sufficient performance under the contract as would give rise to plaintiff's right to commissions, is one of law which is discussed by the Court, infra.

It is not disputed between these parties that during the period of time between their entry into the August brokerage agreement and the issuance of the formal loan commitment numerous negotiations were conducted between them and several modifications of the brokerage agreement were proposed. The exact nature and extent of these proposed modifications need not be set forth in detail as the Court finds them to be just that, proposed modifications of the August agreement which were never accepted by the parties and thus did not attain the force of contract or serve to modify the earlier agreement. In essence, the myriad of papers passed between the parties concerned the schedule of payments of Weniger's commission and not the substance of the underlying agreement (see, e. g., Exhibits 28 and 29). That the defendants considered the August brokerage agreement wholly effective throughout the conduct of this transaction is evidenced by a letter of Mr. Cohn dated May 6, 1968 (Exhibit 31). In such letter, Mr. Cohn made reference to the August agreement and stated:

With regard thereto, this shall confirm that you have fully performed the obligations on your part to be performed in obtaining a mortgage loan commitment for a first mortgage in the sum of $17,280,000 for the above project Union Center Plaza, to be secured by a mortgage to be given to the New York City

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